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Thursday, October 27, 2005

Grassley Gives Tax Reform Panel a Warning

Senator Grassley has some advice for the Tax Reform Panel:

Senior US Senator Foresees Opposition To Tax Panel Reform Proposals, by Mike Godfrey, Tax-News.com: Sen Charles Grassley (R - Iowa) has warned that the tax reform panel's recommendations on limiting mortgage and employer-provided healthcare tax breaks would make it "very difficult" for the Senate to pass a package of new legislation aimed at simplifying the US tax code. ... "When you start messing with sacred things like tax deductibility of health insurance and mortgage interest, particularly the latter, it's going to be very, very difficult to get that as part of a reform package," he stated. Grassley predicted that a tax reform package would be much more likely to be passed if these two provisions were dropped from the legislation.

The outlook for the proposal given in an editorial in the NY Times is grim:

The final report of President Bush's tax reform panel [is] due Tuesday... Popular discontent with advance word on its recommendations is sure to spook Congress into inaction in the coming election year, especially on proposals to limit the mortgage-interest deduction, abolish the deduction for state and local taxes, and reduce the write-off for employer-provided health insurance. ... That's fine with us. The panel's expected report deserves the death sentence that awaits it...

MarketWatch is equally grim with Dead on Arrival. There is the usual silliness from Senator DeMint:

Senators Plan Push To End Income Tax, by Meghan Clyne, NY Sun: Disappointed by the recommendations of President Bush's advisory panel on tax reform, Senator DeMint, a Republican of South Carolina, will introduce legislation this week that would replace America's tax code with a simpler, free-market alternative that would abolish personal and corporate income taxes in favor of a flat-rate levy on retail and business transactions. ... Under Mr. DeMint's plan, all personal income taxes and the attendant bevy of related taxes, deductions, and exemptions, including the estate tax and the alternative minimum tax, would be abolished. ... Instead, individuals would pay an 8.5% federal retail sales tax on all new goods and services. Corporate income taxes would be replaced by an 8.5% business transfer tax charged during purchases of supplies or equipment... the DeMint plan would harm certain sectors privileged by the current code, such as the home mortgage industry...

Echoes of Social Security. Here we go again.

    Posted by on Thursday, October 27, 2005 at 12:36 AM in Budget Deficit, Economics, Income Distribution, Taxes | Permalink  TrackBack (0)  Comments (7)

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